Pan-European Small & Mid-Cap "June Pulse Check: Passive momentum improves..."

Research evidence excerpt

Pan-European Small & Mid-Cap "June Pulse Check: Passive momentum improves..."

Global Research

30 June 2026ab

Pan-European Small & Mid-Cap Equities

Europe including UKJune Pulse Check: Passive momentum improves

despite SMID underperformance in recent weeks Industrial

Natasha Brilliant

Analyst

natasha.brilliant@ubs.com

Pulse check on SMID sentiment: Divergence continues between SMID and +44-20-7567 0645

large-cap fund flows, and SMID is once again underperforming large-caps

Olivier Calvet, CFA

Small and mid-cap (SMID) stocks have have underperformed large-caps across Europe Analyst

since the start of the year, with SMID up 6.4% vs 8.3% for large-caps. While we olivier.calvet@ubs.com

observed some SMID outperformance from the start of February, this has reversed in +41-44-239 2051

recent weeks, and in June, SMIDs underperformed large-caps again. While passive Hai Huynh, CFA

funds saw some inflows in June, active money continues to see outflows in SMID funds. Analyst

Our conversations with investors continue to be dominated by the macro and hai.huynh@ubs.com

geopolitical backdrop and key market themes (namely anything tech-related), but while +44-20-7567 7051

investors are reluctant to make significant portfolio changes for now, given the ongoing Chiara Tomesani

market volatility, we do detect some appetite for stocks which may be over-sold but Analyst

where there is the possibility of positive earnings momentum. In the coming weeks as chiara.tomesani@ubs.com

we head into 1H results, we think the market will look particularly for more clarity on +44-20-7567 3438

FY guidance and will focus on those stocks where the structural story remains intact, but Louise Wiseur, CFA

valuations are compelling. Our strategists recently published Simply SMID (EU): The Analyst